November 12, 1997
Jonathan G. Katz
Secretary
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: File No. S7-26-97
Dear Mr. Katz:
Thank you for requesting comment on proposed legislation HR944 and HR945.
We believe that both these proposals, especially HR945, will have a
negative impact and will ultimately result in increased burden to the
government to support the neediest in our society.
Hasbro, Inc., a worldwide leader in the design, manufacture and marketing of
toys, games, puzzles and infant care products, is a public company whose
shares are listed on the American Stock Exchange. The Hasbro Children's
Foundation is an independent entity which is funded by an annual allocation
of the Hasbro, Inc. Board of Directors. We are a national foundation,
focusing on direct services to children in the areas of health, education
and social services. We are staffed by experts in the field, holding
advanced degrees (MBA, Ph.D., and MPH), and are led by a Board of Trustees
consisting of nationally known experts in a variety of children's issues,
such as child abuse prevention, poverty, homelessness, pediatric health
care, education and others. The Hasbro Children's Foundation funds model
programs that provide direct service to disadvantaged children, and works
with those organizations to adapt and replicate successful solutions to new
communities.
Our concerns regarding HR945 are as follows:
Shareholders do not have the experience, perspective and relevant
information to effectively make contribution decisions.
Our foundation receives over 4,000 requests each year, far more
than we can fund. Our 20 professionals, staff and Trustees have dedicated
their careers to understanding children's issues. Together, we can apply
over 300 years of experience to ensure that the dollars we grant yield the
greatest benefit to those in need.
In reaching funding decisions, we do far more than simply read
requests. We review each potential grantee for a wide range of criteria:
eligibility as a 501(c)(3), quality of programming and the magnitude of
need in the community, ability of the organization to articulate clear
goals and realistic strategies to achieve them, identification of distinct
measures of success or failure, presence of varied sources of support that
will ensure the continuity of the program beyond our funding period, fiscal
viability. To augment our own experience, we consult with experts around
the world to determine best practices. Our staff and Board make site
visits to meet the people responsible for the programs and we observe
operations.
This hands-on involvement, analysis and careful consideration by
experts is what makes our grantmaking most effective, enabling us to use
each dollar to make the greatest impact by reaching the most children and
families in need. It is neither realistic nor reasonable to expect
shareholders to conduct a comparably thorough and informed decision making
process.
Exempting local charities and educational institutions frustrates
philanthropic strategies to develop and propagate "best practices"
nationally.
National foundations have a unique ability to find excellent
solutions to common problems and help organizations adapt them for other
communities. There is no Forbes or Business Week to identify best
practices in the non-profit world. As recipients of requests, Foundations
become the clearinghouse for such information. Limiting funding exemption
to local charities looks to effectively abolish the tremendous benefit of
sharing innovative and successful practices with multiple communities. In
addition, many needy areas are reliant on national charities, such as the
Red Cross or the Salvation Army.
Importantly, the proposed legislation would work against funding
where charity is most needed: for example, the rural poor of Appalachia
have no "local" corporations to fund their urgently needed programs.
Lastly, exemption of educational institutions seems arbitrary as crucial
education for families in poverty (i.e., family literacy, parenting,
violence prevention) takes place outside these institutions in community
centers, legion halls, homes and churches.
If philanthropy is discouraged from funding the neediest, then the
need for support will increasingly fall to the government.
Our concerns regarding HR944 are as follows:
Reporting legislation will cause additional administrative expenses,
thereby reducing the dollars available for charitable purposes.
The additional resources needed for document production, mailings
and other administration will certainly reduce the charitable funds
distributed. Most foundations currently produce an informal report of this
type and provide the information freely. Why not, in a field of committed
community citizens, encourage foundations to report rather than legislate?
HR944 and 945 are unnecessary infringements on corporate democracy.
Shareholders in public corporations routinely put forward proposals
for a vote. Any shareholder who desires disclosure of contributions or
voting on contributions can bring the issue to the company's annual
meeting. If a majority of shareholders desire it, the proposal will pass.
This proposed legislation seeks to impose on all public companies and
shareholders a process they are fully capable of adopting on their own --
but have not.
Charitable giving is, thankfully, part of the "ordinary course of
business" of U.S. publicly-held corporations. Just as it would be
inappropriate to legislate that corporations specifically disclose their
advertising or capital expenditures, much less permit shareholders, rather
than boards of directors and management, to decide such expenditures, so
too is it inappropriate to narrowly focus on charitable giving and give
corporations the message that such expenditures are subject to special
scrutiny. The result will almost certainly be to discourage charitable
giving, again putting increased burden on government.
Thank you again for your consideration of our response to your request for
comment. If you have any questions or would like additional information,
please phone me directly at 212-645-2400.
Sincerely,
Jane S. Englebardt
Executive Director
Hasbro Children's Foundation
32 West 23 Street
New York, New York 10010
Phone: 212-645-2400
Fax: 212-645-6815
E-mail: hcf@compuserve.com
cc: Alan G. Hassenfeld, Chairman and CEO, Hasbro, Inc.
Ellen Block, Chairman, Hasbro Children's Foundation